UPDATE: Bank of America Upgrades AmBev to Buy

Bank of America has published a research report on AmBev

and has upgraded the company from Neutral to Buy after competitors of the company were raided buy Sao Paulo, Brazil state tax officials. In the report, Bank of America writes, "We are raising our rating from Neutral to Buy, following reports that AmBev's largest rival, Petrópolis, and several distributors were raided yesterday by São Paulo state tax officials. We are also increasing our price objective from R$86 to R$95 (from $46 to $50 per ADR), based on what we deem will be greater pricing power and faster earnings growth rates as state authorities improve Brazilian beer industry tax compliance. State direct taxes (ICMS) represent about two-thirds of overall industry levies, and may allow some market participants to create value propositions with substantial brand equity investments that would otherwise be unsustainable. The raid could also prompt state officials to adopt highly sophisticated federal enforcement mechanisms that have dramatically improved federal industry tax takes." Bank of America raises its price objective from $86 to $95 on AmBev, which is currently trading up $0.01 from yesterday's $38.76 closing price.